Commodity Corner: Oil Declines on EIA Report
Light sweet crude oil for November delivery erased the bulk of Tuesday's gains after the Energy Information Administration (EIA) reported an unexpected increase on commercial inventories.
The WTI lost 3.8 percent to settle at $81.21 a barrel after the EIA announced that crude stocks rose by two million barrels last week. The 0.6-percent build caught analysts off-guard; a Platts survey of had projected no change week-on-week. The NYMEX oil benchmark traded within a range from $80.54 to $84.62.
Compounding the pressure on oil was a stronger dollar. Diminishing expectations that an end is in sight for the euro-zone debt crisis caused the euro to weaken against other major currencies. Brent futures ended the day lower, falling 3.1 percent to $103.81 a barrel Wednesday. The November contract price peaked at $107.33 and bottomed out at $103.29.
October natural gas also declined Wednesday, losing nearly two percent to settle at $3.76 per thousand cubic feet. The intraday range for natural gas spanned from $3.74 to $3.83.
The front-month gasoline contract price lost just under a nickel to end the day at $2.65 a gallon—also the intraday low. October reformulated gasoline peaked at $2.71 Wednesday.